Business & Ethics: Chapter#2 Business Ethics and Social Responsibility Sidra Nasreem UCP

Business & Ethics
CHAPTER#2
Business Ethics and social Responsibility
Sidra Nasreem
UCP
Copyright © 2005 by South-Western, a division of Thomson Learning, Inc. All rights reserved.
Chapter 2
Business Ethics and Social Responsibility
Chapter Objectives
1. Explain the concepts of business ethics and social
responsibility.
2. Describe the factors that influence business ethics.
3. List the stages in the development of ethical standards.
4. Identify common ethical dilemmas in the workplace.
5. Discuss how organizations shape ethical behavior.
6. Describe how businesses’ social responsibility is measured.
7. Summarize the responsibilities of business to the general
public, customers, and employees.
8. Explain why investors and the financial community are
concerned with business ethics and social responsibility.
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3
Concern for Ethical and Societal Issues
• Business ethics—standards of business conduct and
moral values.
• Constituencies to which businesses are responsible:
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4
The New Ethical Environment
• High profile investigations and arrests in headlines.
• Yet vast majority of businesses ethical.
• New corporate officers charged with deterring wrongdoing and ensuring ethical standards.
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5
• Johnson & Johnson’s Credo (Part 1)
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6
• Johnson & Johnson’s Credo (Part 2)
2-
7
• Individuals make a difference

• Development of individual
ethics
• Stages of Moral and Ethical
Development
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8
 Common Business
Ethical Challenges
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9
Common Business Ethical
Challenges
• On-the-Job Ethical Dilemmas
• Conflict of Interest—situation in which a business
decision may be influenced for personal gain.
• Honesty and Integrity—telling the truth and adhering to

deeply felt ethical principles in business decisions.
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10
• On-the-Job Ethical Dilemmas
• Loyalty vs. Truth—businesspeople expect their
employees to be loyal and truthful. But ethical conflicts
may arise.
• Whistleblowing—employee’s disclosure to government

authorities or the media of illegal, immoral, or unethical
practices in the organization.
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How Organizations Shape Ethical Conduct
• Structure of an Ethical Environment
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12
• Ethical Awareness
• Code of Conduct—a formal statement that defines how the
organization expects and requires employees to resolve ethical
questions.
• Ethical Reasoning
• Codes of conduct cannot detail a solution for every ethical
situation. So corporations provide training in ethical reasoning.
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13
• Ethical Action
• Helping employees recognize and reason through ethical problems
and turning them into ethical actions.
• Ethical Leadership
• Executives must demonstrate ethical behavior in their actions.
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14
Acting Responsibly to Satisfy Society
• Social Responsibility—management’s acceptance of the

obligation to consider profit, consumer satisfaction, and
societal well-being of equal value in evaluating the firm’s
performance.
• Social Audits—formal procedures that identify and evaluate all
company activities relate to social issues such as conservation,
employment practices, environmental protection, and
philanthropy.
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15
Acting Responsibly to Satisfy Society
• Responsibilities of
Business
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16
• Responsibilities to the General Public
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• Responsibilities to the General Public
• Public Health Issues
• Protecting the Environment
• Recycling—reprocessing of used materials for reuse.
• Green marketing—marketing strategy that promotes
environmentally safe products and production methods.
• Developing the Quality of the Workforce
• Corporate Philanthropy—act of an organization giving
something back to the communities in which it earns profits
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18
• FTC Guidelines for Environmental Claims in Green
Marketing
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19
• Responsibilities to Customers
• Consumerism—public demand that a business consider the
wants and needs of its customers in making decisions.
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20
• Right to Be Safe
• Consumers should feel assured that what they purchase will not harm
them in normal use
• Product Liability
• Right to Be Informed
• Consumers should have enough access to education and product
information to make responsible buying decisions
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• The Right to Choose
• To select which goods and services they want and need
to purchase
• The Right to Be Heard

• Should be able to express legitimate complaints to
appropriate parties
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• Responsibilities to Employees
• Workplace Safety.
• Quality of Life Issues.
• Ensuring Equal Opportunity in the Job.
• Age Discrimination.
• Sexual Harrassment
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• Laws Designed to Ensure Equal Opportunity
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• Responsibilities to Investors and the
Financial Community
• Fundamental goal of any business is to
make a profit.
• Investors and the financial community
demand that businesses behave ethically
as well as legally.
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Business & Ethics

• Individuals make a difference

• Honesty and Integrity—telling the truth and adhering to

• Whistleblowing—employee’s disclosure to government

• Structure of an Ethical Environment

• Social Responsibility—management’s acceptance of the

• The Right to Be Heard

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